A Microsoft-Yahoo Merger Is About More Than Just Battling Google

Yahoo would bring Web 2.0 to Microsoft

4 March 2008—Lost amid the shuffle of Microsoft’s unprecedented offer to acquire Yahoo is the fact that Yahoo has been a standard-bearer for many of the new technologies with which the next generation of the Web is being developed. Whether it is support for the acronym soup of RSS, OPML, OpenID, or trends like ”tagging” and user-generated content, Yahoo has found itself, either through its own efforts or its carefully chosen acquisitions, at the center of the Web 2.0 world.

Tagging is one particularly prominent example of Yahoo’s leadership. The company has quietly encouraged its many users to add descriptions to content in an unstructured way. The resulting pools of content, called ”folksonomies” to contrast them with the strict taxonomies of a structured database, are less expensive to maintain, as they rely on users to define the structure. Yahoo’s lead in the space is due to key acquisitions such as del.icio.us, one of the largest bookmark-sharing services, and Flickr, the Web’s lead photo-sharing site.

Thomas Vander Wal, an independent Internet consultant credited with inventing tagging and folksonomies, says Microsoft could benefit from Yahoo’s tagging expertise. ”There is a lot of value in the research Yahoo has put into tagging providing search results that are a couple of levels above what Google can provide on accuracy for getting exactly what is needed and not just what is good enough,” he says.

According to Vander Wal, Microsoft could use del.icio.us’s social-bookmarking service for its business offerings, particularly as part of its collaboration software, SharePoint. However, Vander Wal warns that the window of opportunity to take advantage of that link is limited. ”The companies that can get the most out of del.icio.us’s social bookmarking have very specific needs for that type of tool,” he says. ”Most are facing loss of knowledge, context, and lack of budgets to improve finding tools on their intranets. If Microsoft waits for a complete integration with Yahoo’s technologies, it will be too late for most of these organizations.”

Another way Yahoo has been a standard-bearer is in providing support for digital identity, particularly OpenID, as a way of employing a single user name all over the Internet. Yahoo is both a distributor of OpenID identities and a consumer of profiling information through its many sites. Microsoft, however, has its own identity system, known as Passport.

OpenID is itself an example of an even broader initiative known as Data Portability, which is an effort to allow users to manage their online identity, contacts, relationships, personal details, and media and control who has access to this information. Chris Saad, chairperson for DataPortability.org, the leading advocacy group for the effort, sees a Microsoft-Yahoo merger as a potential boost to Data Portability. ”Instead of forcing Yahoo sites to adopt the Passport log-in (or vice versa), Microsoft might choose to port everything to a new Data Portabilityenabled log-in system, like OpenID, and integrate that across all their properties,” he says. ”In fact, they might see Data Portability as an opportunity to bridge the Microsoft and Yahoo properties together while respecting user rights, [and not] forcing them to use a new proprietary log-in mechanism.”

”It’s pretty clear that Microsoft is moving in an open direction,” says Tim O’Reilly, CEO of O’Reilly Media and the man who gave the Web 2.0 phenomenon its name. The Internet is driving technology companies to be more open in order to remain successful, he says. O’Reilly says Microsoft is trying to acquire Yahoo ”not just for technology but also to acquire the people and knowledge associated with that space.”

Ultimately, ”the underlying technologies and concepts favored by Yahoo’s culture could end up helping Microsoft regain a software-development mantle it has ceded to more nimble online players,” says Bill Washburn, executive director of the OpenID Foundation, which was created to promote a standard eliminating the need for multiple user names across different Web sites. ”I have the sense that the culture of Redmond is evolving. Yahoo will potentially find allies within the Microsoft environment. I think that Yahoo will be much more influential on Microsoft than people might imagine.”

About the Author

Tristan Louis, a veteran of the first dot-com boom, is an author, entrepreneur, and blogger.